Cognac/Brandy Producer, Hennessy, Reiterates its Commitment to the Chinese Market

The world’s largest Cognac maker is stepping up its investments in China as it remains upbeat on the company’s long-term growth prospects in the country, a top executive said. Frederic Noyere, managing director of LVMH-Moet Hennessy Diageo China, said he believes that in the future, the wine market in China will center on consumption by the emerging middle class. Already the company’s second-largest market after the United States, China will play a major role in the French firm’s business, Noyere said…Full Article: ECNS.cn Feb 2016

Key Point

In January 2016, Hennessy began selling its liquors on JD.com as part of its e-commerce/online growth strategy.

ChinaAg Comments

In October 2015, LVMH’s Moet Hennessy spirits division stated that Chinese demand for their cognac had improved slightly.

In 2014, Hong Kong imported 4.8 million liters of brandy/cognac and exported 1.9 million liters to mainland China, equating to a 40% re-export rate. From 2010 to 2014, total re-export volumes averaged 43% of all imports. The top supplier was France, while Singapore was a strong secondary supplier. However, nearly all of Singapore’s brandy/cognac supply originated from France, meaning that a fair amount of French cognac was re-exported twice (by Singapore and Hong Kong) before reaching the mainland. In 2014, Hong Kong brandy/cognac imports were valued at US$215 million. Impressive as this figure is, Hong Kong’s brandy/cognac re-export market has been stagnant due in part to Xi Jinping’s anti-corruption and anti-extravagance campaign. Launched in November 2012, the austerity campaign has had a dampening effect on the consumption of high-end liquors within China.